APRIL-JUNE 2015 JANUARY-JUNE 2015

Transcription

1 Interim report APRIL-JUNE 2015 JANUARY-JUNE 2015 Net sales of SEK 9,666m (9,816) Adjusted operating income SEK 33m (-30). Item affecting comparability, net, SEK 470m (0) from a capital gain and an impairment loss. Operating income SEK 503m (-30). Net income totaled SEK 390m (-76). Cash flow from operating activities totaled SEK -127m (120). Net sales of SEK 19,699m (19,815) Adjusted operating income SEK 345m (76). Item affecting comparability, net, SEK 470m (0) in Q2 from a capital gain and an impairment loss. Operating income SEK 815m (76). Net income totaled SEK 593m (24). Cash flow from operating activities totaled SEK 1,013m (-349). We deliver! PostNord is the leading supplier of communication and logistics solutions to, from and within the Nordic region. We also ensure the postal service to households and businesses in Sweden and Denmark. With our expertise and strong distribution network, we develop options for tomorrow s communication, e-commerce, distribution and logistics in the Nordic region. In 2014, the Group had 38,000 employees and sales of SEK 40 billion. The Parent Company is a Swedish public limited company headquartered in Solna, Sweden. Visit us at

2 FINANCIAL OVERVIEW AND KEY RATIOS Apr-Jun Apr-Jun Excl. 1) Jan-Jun Jan-Jun Excl. 1) Jan-Dec SEKm, unless otherwise specified r r r r 2014 INCOME ITEMS Net sales 9,666 9,816-2% -3% 19,699 19,815-1% -2% 39,950 Operating income (EBITDA) , % 2,198 Operating margin (EBITDA) 9,7% 3,9% 8,6% 4,6% 5,5% Operating income (EBIT) Operating margin (EBIT) 2) 5,2% -0,3% 4,1% 0,4% 0,9% Adjusted operating income (EBIT) 3) Adjusted operating margin (EBIT) 2) 3) 0,3% -0,3% 1,8% 0,4% 2,2% Income before tax Net income CASH FLOWS Cash flows from operating activities , FINANCIAL POSITION Financial preparedness 3,445 3,074 12% 3,445 3,074 12% 3,843 Net debt 743 2,926-75% 743 2,926-75% 3,672 KEY RATIOS Earnings per share, SEK 0,19-0,04 0,30 0,01 0,09 Net debt/ebitda, times 0,3 1,4 0,3 1,4 1,7 Net debt ratio 8% 33% 8% 33% 46% Return on capital employed (ROCE) 9,4% 4,3% 9,4% 4,3% 3,1% Average number of employees 4) 35,398 37,589 35,184 37,370 37,407 1) Change excluding acquisitions/divestments and currency. 2) From 2015 a new definition of operating margin (operating income as % of net sales) is applied. Numbers for 2014 are restated for comparability. See note 7, Definitions 3) Adjusted for items affecting comparability. See table on page 4 and note 7, Definitions. 4) 2014 years numbers are adjusted for change in calculations, e.g. terminated staff in "Futurum" are no longer included. The report comments on developments in April-June and January-June 2015, respectively, compared to the same periods in 2014 unless otherwise stated. 1 PostNord (publ), Interim report January-June 2015

3 CEO COMMENTS CONTINUED FOCUS ON SERVICE OFFERINGS AND LONG-TERM PROFITABILITY E-commerce displays strong growth, while mail volumes continue to fall, especially in Denmark. Implemented restructuring programs improve profit. During the quarter PostNord signed several major contracts in the area of parcel distribution, both in B2B and B2C, as well as a significant contract with the COOP chain of cooperative association supermarkets in Denmark regarding the distribution of direct mail. About a third of the new agreements that we enter into are in the e-commerce segment, which is continuing to grow strongly, and B2C parcel volumes rose by 17% during the quarter. During the quarter PostNord expanded its strategic cooperation with the international network DPDgroup, which is the second largest service provider in the European parcel market. The core of the expanded cooperation comprises a powerful B2C strategy, which will link PostNord s and DPDgroup s distribution networks, thereby creating a harmonized system with service points at 26,000 locations in Europe. PostNord entered into an agreement to acquire the company Uudenmaan Pikakuljetus Oy (UPK) in Finland. This deal reinforces PostNord Finland s position in logistics solutions. In the wake of continued digitization, mail volumes continued to decline, especially in Denmark. In total, mail volumes declined by 9% in the quarter, of which 15% in Denmark and 7% in Sweden. It is vital that amendments to the postal regulations should be based on the continually changing needs of customers so that a universal postal service can be maintained in the long term under reasonable economic conditions. In late April the Court of Justice of the European Union announced its verdict that postal services not covered by individually negotiated agreements are to be VAT-exempt. PostNord is now awaiting ongoing amendments to Swedish VAT legislation. This may entail an increase in costs for PostNord due to a reduced right to deductions for input VAT. The Group s adjusted operating income in Q2 totaled SEK 33m (-30). For H1 the Group s adjusted operating income amounted to SEK 345m (76). The result is adjusted for a capital gain and an impairment loss totaling SEK 470m (0), net. The restructuring work that we have implemented is having the intended effect on the result. With rapidly declining mail volumes we face major challenges, but we are concurrently strengthening our position as a leading logistics operator. Continuous efficiency improvements and adaptations are, however, essential to secure long-term profitability. With a great focus on customers we will deliver on our promises. Håkan Ericsson President & Group CEO 2 PostNord (publ), Interim report January-June 2015

4 IMPORTANT EVENTS IN APRIL-JUNE Verdict of the Court of Justice of the European Union on charging VAT Late April saw the verdict of the Court of Justice of the European Union on the case brought by the European Commission against the Swedish State for non-compliance with EU rules regarding value added tax on postal services. The verdict went in the Commission s favor, with the result that universal postal services not covered by individually negotiated agreements are to be VAT-exempt. For PostNord, this may entail higher costs because paid VAT for business-related costs, concerning VAT-exempt operations, will not be VAT deductible. PostNord will charge VAT according to applicable legislation while awaiting any amendments to Swedish VAT legislation. Annual General Meeting 2015 PostNord s Annual General Meeting (AGM) took place on April 23, 2015 at the Group s headquarters in Solna. The Chairman and all Board members were re-elected and the accounting firm KPMG AB was re-appointed to serve in the period until the end of the next AGM. New managing director for the pension foundation, Postens Pensionsstiftelse On June 1, 2015 John Vivstam took up the position as the new managing director of the pension foundation, Postens Pensionsstiftelse, as Dag Hasslegren retired. The foundation manages and secures pension obligations for the PostNord Group AB and PostNord Sverige AB companies. On June 30, 2015 the market value of the assets in the pension foundation stood at SEK 18.9 billion. The pension liability in the PostNord Group amounted to SEK 18.4 billion. Evaluation of conditions for a possible divestment of the Strålfors business A possible divestment of the Strålfors business continues to be evaluated. The major part of the fulfilment business operated by Strålfors has been transferred to PostNord Sweden and will not be affected by any divestment. In May Annemarie Gardshol, Chief Strategy Officer and Head of E-commerce, was appointed acting CEO of PostNord Strålfors as Per Samuelsson has left the company. Divestment of property in Denmark A property in central Copenhagen was divested for a purchase consideration of DKK 925m at the end of June, which resulted in a capital gain of SEK 500m. In conjunction with the transaction, a property loan of SEK 665m was taken over by the buyer. Cash and cash equivalents of SEK 499m were settled in July Agreement to acquire the company Uudenmaan Pikakuljetus Oy (UPK) in Finland PostNord Oy has entered into an agreement to acquire Uudenmaan Pikakuljetus Oy (UPK) from DSV Road Oy. The deal considerably strengthens PostNord s position in Finland within domestic parcel transportation, scheduled deliveries, logistics solutions for healthcare and e-commerce and temperature-controlled transport services. The transaction was approved by the Finnish Competition and Consumer Authority in the beginning of August. 3 PostNord (publ), Interim report January-June 2015

5 GROUP SALES AND EARNINGS Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 2Q'15 12% 10% 8% 6% 4% 2% 0% -2% Net sales Operating margin (EBITDA) Operating margin (EBIT) April-June Excluding acquisitions and exchange rate effects, PostNord s net sales decreased by 3%. As a result of continued digitization, mail volumes declined by a total of 9%, of which 15% in Denmark and 7% in Sweden. E-commerce continued to show strong growth, generating higher volumes in goods distribution of mail and parcels. The Group s parcel volumes increased by 12%, with e-commercerelated B2C parcel volumes rising 17%. Parcel volumes are increasing, but cannot fully compensate for the declining mail volumes on net sales level. The Group s adjusted operating income totaled SEK 33m (-30) and the operating margin was 0.3% (-0.3). The improvement is attributable to implemented efficiency programs. The Group s reported operating income totaled SEK 503m (-30). The operating margin was 5.2% (-0.3). The result includes items affecting comparability, net, totaling SEK 470m (0), of which SEK 500m comprises a capital gain from divestment of a property in Denmark and SEK 30m comprises impairment loss on the interest held in the Eson Pac Group AB SEK m PostNord Sweden PostNord Denmark PostNord Norway PostNord Finland Other Group total Impairment intangible assets Capital gain, real estate, Denmark Total items affecting comparability Net financial items decreased to SEK -48m (-32) and were mainly impacted by lower interest income and in certain countries negative deposit interest rates. The tax expense for the quarter was SEK -65m (-14). Net income totaled SEK 390m (-76). January-June Excluding acquisitions and exchange rate effects, PostNord s net sales decreased by 2%. Mail volumes declined by a total of 8%, of which 15% in Denmark and 6% in Sweden. Parcel volumes increased by 13%, with e-commerce-related B2C parcel volumes rising 17%. The Group s adjusted operating income reached SEK 345m (76). The result has been adjusted for items affecting comparability of SEK 470m, net, (0) during Q2. The improvement is mainly attributable to implemented restructuring programs, but Q also included a provision for restructuring costs of SEK 157m related to the new organization. The Group s reported operating income totaled SEK 815m (76). The operating margin was 4.1% (0.4). Net financial items reached SEK -70m (-53), and H1 tax totaled SEK -152m (1). Net income totaled SEK 593m (24). 4 PostNord (publ), Interim report January-June 2015

6 FINANCIAL POSITION ON JUNE 30, 2015 The Group s equity increased to SEK 9,421m from SEK 7,637m on March 31, The increase primarily comes from revaluation of pension obligations and pension assets under management totaling SEK 1,489m, net, and net income of SEK 390m as well as translation differences of SEK 96m. Revaluation of the pension liability was made with a higher discount rate following the higher interest rate level in the Swedish mortgage bond market. The Group s net debt decreased by SEK 2,370m during the second quarter. The decline is mainly attributable to the aforementioned revaluation of the pension liability as well as the fact that a SEK 665m property loan was taken over by the buyer in conjunction with a divestment. The debt ratio (net debt/equity) was 8%, compared to 41% on March 31, The net debt/ebitda ratio (trailing 12-months) was 0.3. Return on capital employed (trailing 12-months) reached 9.4% (4.3). The improvement includes cost efficiency measures and the quarter s capital gain, while earlier periods have been burdened with restructuring costs. Net debt Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 SEKm Financial receivables 1,286 1,341 1,092 1,125 1,628 Current interest-bearing receivables Cash and cash equivalents 1, ,843 2,466 1,445 Interest-bearing debt -5,134-5,521-5,384-5,141-3,816 Pension provisions 1) ,223-1,563 0 Net debt -2,926-4,197-3,672-3, ) Includes assets under management. Per 30 June 2015, the assets under management are greater than the estimated net present value of the pension liabilities and are accounted for under the line item Financial receivables. PostNord is implementing capital efficiency programs in two areas: reducing working capital and divesting parts of the property portfolio. A property in central Copenhagen was divested for DKK 925m during the quarter, resulting in a capital gain of SEK 500m. The buyer took over a property loan of SEK 665m in conjunction with the transaction, and PostNord repaid the remaining loan amount of SEK 87m. Cash and cash equivalents of SEK 499m were settled in July During the quarter SEK 540m was repaid under the company s MTN bond program. The Group s financial preparedness totaled SEK 3,445m, compared to SEK 4,466m on March 31, The total consisted of cash and cash equivalents of SEK 1,445m and an unutilized revolving credit facility (RCF) of SEK 2,000m maturing in PostNord (publ), Interim report January-June 2015

7 CASH FLOW April-June Cash flow from operating activities totaled SEK -127m (120). Cash flow was negatively affected mainly by the fact that outgoing payments of about SEK 300m related to the first quarter were deferred until the second quarter Cash flow from investing activities totaled SEK -208m (-467). Investments in property, plant and equipment have decreased to a lower level since construction work of terminals in Sweden have been completed and tighter investment governance has been adopted. The investments primarily related to vehicles in production and equipment for transportation and sorting. In July 2015 PostNord received proceeds of SEK 499m attributable to the property sale. Cash flow from financing activities totaled SEK -682m (426). During the period SEK 540m was repaid under the company s MTN bond program, and SEK 87m of a property loan was repaid in conjunction with the divestment of a property. January-June Cash flow from operating activities totaled SEK 1,013m (-349). The improvement compared to the previous year is mainly because Q was mainly affected by payment deferrals at the turn of the year 2013/2014 and higher operating liabilities during H mainly related to accrued expenses and deferred income. Cash flow from investing activities has, according to plan, dropped down to a lower level and amounted to SEK -463m (-930). The lower level has been achieved because the new terminals in Sweden are complete and tighter governance of investing activities has been adopted. Cash flow from financing activities totaled SEK -946m (371). During H1 a property loan was taken over in conjunction with the divestment of a property; bond loans under the MTN program and commercial paper were repaid. 6 PostNord (publ), Interim report January-June 2015

8 COUNTRIES Since the start of 2015, financial reporting for the segments is presented per country organization. Common notes applicable to the financial tables are presented at the end of the segments on page 10. PostNord Sweden PostNord Sweden 1) 2) Apr-Jun Apr-Jun Excl. 3) Jan-Jun Jan-Jun Excl. 3) SEKm r r r r Net sales 5,665 5,682 0% 0% 11,483 11,481 0% 0% of which Mail & Communication (external) 3,189 3,343-5% -5% 6,547 6,806-4% -4% of which Logistics (external) 2,224 2,135 4% 4% 4,445 4,251 5% 5% Operating income (EBIT) Operating margin, % 4) 3,1% 1,8% 3,5% 1,5% April-June PostNord Sweden s net sales were unchanged. Mail and parcel volumes related to e-commerce showed positive growth. Mail & Communication in Sweden, reported a decrease of 5% in sales as the result of a 7% decline in mail volumes. Sales for Logistics in Sweden increased 4%, above all as a result of higher parcel volumes and new customer contracts. Operating income totaled SEK 173m (101). The positive increase in the result is mainly attributable to implemented efficiency improvements. January-June PostNord Sweden s net sales were unchanged. Mail & Communication in Sweden reported a decrease of 4% in sales as the result of a 6% decline in mail volumes. Goods distribution showed growth and had a positive impact on sales. Sales for Logistics in Sweden increased 5%, mainly due to higher parcel volumes and new customer contracts won. Operating income totaled SEK 401m (173). The improvement is mainly due to implemented efficiency measures, but also reflected the fact that Q1 of 2014 included provisions for restructuring costs of SEK 105m. 7 PostNord (publ), Interim report January-June 2015

9 PostNord Denmark PostNord Denmark 1) 2) Apr-Jun Apr-Jun Excl. 3) Jan-Jun Jan-Jun Excl. 3) SEKm r r r r Net sales 2,402 2,453-2% -5% 4,969 5,013-1% -5% of which Mail & Communication (external) 1,472 1,585-7% -10% 3,090 3,301-6% -10% of which Logistics (external) 6) % 4% 1,640 1,488 10% 6% Operating income (EBIT) Operating margin, % 4) 12,4% -7,9% 5,1% -4,3% Adjusted operating income (EBIT) 5) Adjusted operating margin, % 4) 5) -8,4% -7,9% -5,0% -4,3% April-June PostNord Denmark s net sales were down 2%. Excluding acquisitions and exchange rate effects, net sales decreased by 5% as a result of declining mail volumes, falling numbers of direct mail recipients and prevailing tough competition in the logistics industry. Excluding exchange rate effects, Mail & Communication in Denmark declined by 10% as a result of a 15% fall in mail volumes. Logistics in Denmark increased by 4%, excluding exchange rate effects, thanks to higher parcel volumes and new customer contracts in service logistics. Adjusted operating income totaled SEK -202m (-193). The income was primarily affected by the steep decline in mail volumes. A property in central Copenhagen was divested for DKK 925m during the quarter, resulting in a capital gain of SEK 500m. January-June PostNord Denmark s net sales were down 1%. Excluding acquisitions and exchange rate effects, net sales fell by 5%. Excluding exchange rate effects, Mail & Communication in Denmark declined by 10% as a result of a 15% fall in mail volumes. Logistics in Denmark increased by 6%, excluding exchange rate effects, as a result of higher volumes in parcel logistics and new customer contracts in service logistics. Adjusted operating income totaled SEK -249m (-215). PostNord Norway PostNord Norway 1) 2) Apr-Jun Apr-Jun Excl. 3) Jan-Jun Jan-Jun Excl. 3) SEKm r r r r Net sales 1,056 1,078-2% -3% 2,133 2,120 1% 0% of which Mail & Communication (external) % 28% % 38% of which Logistics (external) % -4% 1,918 1,945-1% -2% Operating income (EBIT) % Operating margin, % 4) -0,5% 1,2% 0,3% 1,2% April-June PostNord Norway s net sales decreased by 2%. Excluding acquisitions and exchange rate effects, net sales fell by 3%. Growth in the e-commerce market remains strong, but the tough price competition in logistics is holding back both sales and profitability. Operating income totaled SEK -5m (13). The transport and logistics company Jetpak Borg AS was acquired and financially consolidated first of May to add customized solutions for overnight long-distance deliveries to car dealers, workshops and similar segments in Norway. Jetpak Borg s unique distribution system provides nightly longdistance shipments from centralized warehouses in Scandinavia to more than 500 recipients in Norway. The company has annual sales of approximately NOK 120m. 8 PostNord (publ), Interim report January-June 2015

10 January-June During H1 PostNord Norway s net sales increased by 1% year-on-year. Excluding acquisitions and exchange rate effects, net sales were unchanged. Growth in the e-commerce market remains strong, but the tough price competition in logistics is holding back both sales and profitability. Operating income totaled SEK 6m (26). PostNord Finland PostNord Finland 1) 2) Apr-Jun Apr-Jun Excl. 3) Jan-Jun Jan-Jun Excl. 3) SEKm r r r r Net sales % 4% % 3% of which Mail & Communication (external) 3 3 3% 1% 7 7-6% -10% of which Logistics (external) % 4% % 1% Operating income (EBIT) Operating margin, % 4) -0,6% -1,3% 0,0% -1,6% April-June PostNord Finland s net sales grew by 7%. Excluding acquisitions and exchange rate effects, net sales increased 4%, primarily in parcels and pallets sales. This was achieved despite a challenging economic situation in Finland and tough competition. Operating income totaled SEK -1m (-2). During the quarter an agreement was entered into to acquire Uudenmaan Pikakuljetus Oy (UPK) from DSV Road Oy. The deal considerably strengthens PostNord s position in Finland within domestic parcel transportation, scheduled deliveries, logistics solutions for healthcare and e-commerce and temperature-controlled transport services. The transaction was approved by the Finnish Competition and Consumer Authority in the beginning of August. January-June PostNord Finland s net sales grew 7%. Excluding acquisitions and exchange rate effects, net sales increased by 3%, primarily in parcels and pallets sales. Operating income totaled SEK 0m (-5). The improvement is related to higher sales and previously implemented cost-cutting measures. 9 PostNord (publ), Interim report January-June 2015

11 PostNord Strålfors PostNord Strålfors 1) 2) Apr-Jun Apr-Jun Excl. 3) Jan-Jun Jan-Jun Excl. 3) SEKm r r r r Net sales % -3% 1,225 1,209 1% -1% Operating income (EBIT) Operating margin, % 4) 1,4% -1,4% 2,8% -0,6% April-June The figures for PostNord Strålfors have been restated for 2014 to reflect that the majority of its fulfilment business has been transferred to PostNord Sweden. Net sales for PostNord Strålfors decreased by 1%. Excluding acquisitions and exchange rate effects, net sales fell by 3%. Reported operating income totaled SEK 8m (-8). The improvement is mainly attributable to implemented cost-cutting programs. The process concerning a possible divestment of Strålfors continues. In May Annemarie Gardshol, Chief Strategy Officer and Head of E-commerce, was appointed acting CEO of PostNord Strålfors since Per Samuelsson has left the company. January-June Net sales for PostNord Strålfors increased by 1%. Excluding acquisitions and exchange rate effects, net sales fell by 1%. Operating income totaled SEK 34m (-7). The improvement was mainly due to cost-cutting programs implemented, but also reflected the fact that the first quarter of 2014 included a provision for ongoing restructuring. Other countries and eliminations Other countries and eliminations 1) 2) Apr-Jun Apr-Jun Jan-Jun Jan-Jun SEKm r r Net sales % % of which internal Eliminations , Operating income (EBIT) % % January-June Net sales are primarily related to Direct Link. In Q2 an impairment loss of SEK 30m was recognized on the interest held in Eson Pac Group AB. Common notes applicable to the financial tables in the above section: 1) Division into geographic areas is principally based on registered corporate domicile. 2) All figures are adjusted in line with the new organization and Group overheads are charged to all countries, but not PostNord Strålfors. See Note 2, Segment reporting 3) Change excluding acquisitions/divestment within operational activities and exchange rates. 4) As of 2015 a new definition for operating margin is applied (operating income as a percentage of net sales). Comparative periods have been restated. See Note 7, Definitions 5) Adjusted for items affecting comparability. See Note 7, Definitions 6) Including Logistics operations in Germany. 10 PostNord (publ), Interim report January-June 2015

12 BUSINESS AREAS External net sales 1) Apr-jun Apr-jun Excl. 2) Jan-jun Jan-jun Excl. 2) SEKm r r r r Mail & Communication 5,002 5,255-5% -6% 10,286 10,742-4% -6% Logistics 4,101 3,987 3% 2% 8,229 7,900 4% 3% PostNord Strålfors % -4% 1,183 1,172 1% -2% Group total 9,666 9,816-2% -3% 19,699 19,815-1% -2% 1) 2014 numbers are restated in accordance with the new organization. 2) Change excluding acquisitions/divestments and currency. Mail & Communication Year-on-year net sales for Business area Mail & Communication decreased by 5% during the quarter. Excluding acquisitions and exchange rate effects, net sales fell by 6%. The lower net sales are mainly due to continued digitization and declining mail volumes. Mail volumes, millions of units Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 2Q'15 Sweden, priority mail Denmark, priority mail Sweden, non-priority mail Denmark, non-priority and C-mail Mail volumes declined by a total of 9% in the quarter due to digitization, of which 15% in Denmark and 7% in Sweden. The volume decline was somewhat mitigated by further strong growth in e-commerce-related services. During H1 mail volumes fell by a total of 8%, of which 15% in Denmark and 6% in Sweden, year-on-year. 11 PostNord (publ), Interim report January-June 2015

13 Logistics Year-on-year net sales for Business area Logistics rose 3% during the quarter. Excluding acquisitions and exchange rate effects, net sales increased 2%. E-commerce is continuing to show strong growth and parcel volumes rose 12% during the quarter, of which the number of e-commerce-related B2C items increased by 17%. Parcel volumes, millions of units Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 2Q'15 Parcels, total PostNord Strålfors See comments on PostNord Strålfors in the Countries section. RISKS AND UNCERTAINTIES PostNord is exposed to strategic, operational and financial risks. Please refer to PostNord s 2014 Annual and Sustainability Report (pages and Note 2 on pages 66-67), for a description of risks, uncertainties, risk management and significant assessments and estimates. No material changes or assessments have been made since the publication of the Annual and Sustainability Report. 12 PostNord (publ), Interim report January-June 2015

14 FINANCIAL CALENDAR Interim report January-September October 2015 Year-end report February 2016 Solna, August 13, 2015 PostNord AB (publ), CIN The Board of Directors and the President and Group CEO declare that the interim report January- June 2015 provides a true and fair view of the Group s and Parent Company s operations, position and results and describes material risks and uncertainties to which the Parent Company and the companies included in the Group are exposed. Jens Moberg Board chairman Christian Ellegaard Director Gunnel Duveblad Director Mats Abrahamsson Director Anitra Steen Director Sisse Fjelsted Rasmussen Director Torben Janholt Director Magnus Skåninger Director Lars Chemnitz Employee representative Johan Lindholm Employee representative Ann-Christin Fällén Employee representative Håkan Ericsson President and Group CEO This report has not been subject to review by the Company's auditors. PostNord AB (publ) is required to disclose this information under the Securities Markets Act. The information was submitted for publication at 8:30 a.m. CET on August 13, Every care has been taken in the translation of this interim report. In the event of discrepancies, the Swedish original will supersede the English translation. CONTACT INFORMATION CFO Gunilla Berg, +46 (0) Chief Communications Officer Per Mossberg, +46 (0) Head of Investor Relations Susanne Andersson, +46 (0) ir@postnord.com Sweden Mailing address: SE Stockholm Visiting address: Terminalvägen 24, Solna Tel.: +46 (0) Denmark Mailing and visiting address: Tietgensgade 37, 1566 Copenhagen V Tel.: PostNord (publ), Interim report January-June 2015

15 FINANCIAL STATEMENTS Consolidated income statement Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec SEKm Note Net sales 9,666 9,816 19,699 19,815 39,950 Other income Income 2 10,225 9,897 20,327 19,956 40,582 Personnel expenses 3-4,587-4,736-9,123-9,407-18,212 Transport expenses 3-2,456-2,435-4,929-4,726-9,832 Other expenses 3,4-2,248-2,342-4,584-4,922-10,356 Depreciation and impairments ,847 Expenses -9,722-9,929-19,518-19,889-40,247 Participations in the earnings of associated companies OPERATING INCOME Financial income Financial expenses Net financal items INCOME BEFORE TAX Tax NET INCOME Attributable to Parent company shareholders Non-controlling interests Earnings per share, SEK 0,19-0,04 0,30 0,01 0,09 Consolidated statement of comprehensive income Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec SEKm NET INCOME OTHER COMPREHENSIVE INCOME Items that cannot be transferred to net income Revaluation of pension liabilities 1, , ,682 Change in deferred tax Total 1, ,312 Items that have been or may be transferred to net income Cash flow hedges after tax Translation differences 1) Total TOTAL OTHER COMPREHENSIVE INCOME 1, ,087 COMPREHENSIVE INCOME 1, , Attributable to Parent company shareholders 1, , Non-controlling interests ) Translation differences refer to the translation of group equity in foreign currencies. 14 PostNord (publ), Interim report January-June 2015

16 Consolidated balance sheet Jun 30 Sep 30 Dec 31 Mar 31 Jun 30 SEKm Note ASSETS Goodwill 3,368 3,393 3,372 3,361 3,361 Other intangible assets 1,497 1,445 1,319 1,244 1,163 Property, plant and equipment 9,604 9,933 9,923 9,066 8,873 Participations in associated companies and joint ventures Financial investments Other non-current receivables 1,131 1, ,420 Deferred tax assets Total non-current assets 16,377 16,709 16,407 15,486 15,646 Inventories Tax assets Trade receivables 4,520 4,626 4,620 4,689 4,402 Prepaid expenses and accrued income 1,592 1,535 1,289 1,277 1,484 Other receivables ,129 Short-term investments Cash and cash equivalents 1, ,843 2,466 1,445 Assets held for sale Total current assets 9,185 8,633 9,057 10,333 9,310 TOTAL ASSETS 25,562 25,342 25,464 25,819 24,956 EQUITY AND LIABILITIES EQUITY Capital stock 2,000 2,000 2,000 2,000 2,000 Other contributed equity 9,954 9,954 9,954 9,954 9,954 Reserves -1,736-1,702-1,692-1,744-1,836 Retained earnings -1,425-1,517-2,275-2, Total equity attributable to parent company shareholders 8,793 8,735 7,987 7,633 9,419 Non-controlling interests TOTAL EQUITY 8,797 8,739 7,991 7,637 9,421 LIABILITIES Non-current interest-bearing liabilities 4,341 4,340 4,577 3,772 3,805 Other non-current liabilities Pensions ,223 1,563 Other provisions 4 1,370 1,393 1,730 1,655 1,526 Deferred tax liabilities Total non-current liabilities 7,104 7,304 8,239 7,654 6,323 Current interest-bearing liabilities 793 1, , Trade payables 2,041 1,811 2,010 2,252 2,070 Tax liabilities Other current liabilities 1,814 2,023 1,742 1,762 1,919 Accrued expenses and prepaid income 4,299 3,721 3,929 4,442 4,570 Other provisions Total current liabilities 9,661 9,299 9,234 10,528 9,212 TOTAL LIABILITIES 16,765 16,603 17,473 18,182 15,535 TOTAL EQUITY AD LIABILITIES 25,562 25,342 25,464 25,819 24, PostNord (publ), Interim report January-June 2015

17 Consolidated statement of changes in equity Equity attributable to the parent company's shareholders SEKm Capital stock 1) Contributed equity Translation differences Hedging reserve Retained earnings Noncontrolling interests Total equity Opening balance 1 Jan ,000 9,954-1,917-1, ,034 Other comprehensive income for the period Net income for the period Other comprehensive income for the period Total other comprehensive income for the period Dividend Closing balance 30 Jun ,000 9,954-1, , ,797 Opening balance 1 Jul ,000 9,954-1, , ,797 Other comprehensive income for the period Net income for the period Other comprehensive income for the period , Total other comprehensive income for the period Dividend -1-1 Closing balance 31 Dec ,000 9,954-1, , ,991 Opening balance 1 Jan ,000 9,954-1, , ,991 Other comprehensive income for the period Net income for the period Other comprehensive income for the period Total other comprehensive income for the period , ,433 Dividend -3-3 Closing balance 30 Jun ,000 9,954-1, ,421 1) Number of shares is 2,000,000,001: 1,524,905,971 ordinary shares and 475,094,030 series B shares. 16 PostNord (publ), Interim report January-June 2015

18 Consolidated statement of cash flows Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec SEKm OPERATING ACTIVITIES Income before tax Adjustments for non-cash items: Reversal of depreciation and impairments ,847 Capital gain/loss from sale of PP&E Change in pension liability Other provisions Other items not affecting liquidity Pensions paid ,045 Other provisions, liquidity effect Taxes Cash flow from operating activities before changes in ,424 working capital Cash flow from changes in working capital Increase(-)/decrease(+) in inventories Increase(-)/decrease(+) in other operating receivables Increase(+)/decrease(-) in other operating liabilities Other changes in working capital Changes in working capital Cash flow from operating activities , INVESTING ACTIVITIES Purchase of property, plant and equipment ,478 Sale of property, plant and equipment Capitalized development expenditures Purchase of other intangible fixed assets Divestment of other intangible fixed assets 5 Acquisition of subsidiaries, net Change in financial assets Cash flow from investing activities ,386 FINANCING ACTIVITIES Amortized debts New debts raised ,350 Change in finance leasing liabilities Dividend paid to parent company owners Dividend paid to non-controlling interests Net pension transactions Increase(+)/decrease(-) in other interest-bearing liabilities Cash flow from financing activities CASH FLOW FOR THE PERIOD -1, Cash and cash equivalents, opening balance 2, ,843 1,981 1,981 Translation difference in cash and cash equivalents Cash and cash equivalents, closing balance 1,445 1,074 1,445 1,074 1, PostNord (publ), Interim report January-June 2015

19 PARENT COMPANY The parent company, PostNord AB, conducted a very limited intercompany service operation and had three employees as of June 30, Parent Company income statement Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec SEKm Note Other income Income Personnel expenses Other expenses Operating expenses OPERATING INCOME Income from participations in group companies 200 Interest income and similar income items Interest expense and similar expense items Financial items Income after financial items Balance sheet appropriations 182 Income before tax Tax NET INCOME Parent Company statement of comprehensive income Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec SEKm Net income Other comprehensive income for the period COMPREHENSIVE INCOME Parent Company balance sheet Jun 30 Sep 30 Dec mar 30 Jun SEKm Note ASSETS Financial assets 11,685 11,686 11,685 11,686 11,691 Total non-current assets 11,685 11,686 11,685 11,686 11,691 Current receivables 8,544 8,880 9,043 8,828 8,276 Total current assets 8,544 8,880 9,043 8,828 8,276 TOTAL ASSETS 20,229 20,566 20,728 20,514 19,967 EQUITY AND LIABILITIES Equity 15,489 15,449 15,771 15,772 15,762 Non-current liabilities 3,947 3,948 4,183 4,156 4,152 Current liabilities 793 1, TOTAL EQUITY AND LIABILITIES 20,229 20,566 20,728 20,514 19,967 Parent Company pledged assets and contingent liabilities Assets pledged as collateral Warranty, PRI Guarantees on behalf of subsidiaries Total PostNord (publ), Interim report January-June 2015

20 NOTES TO FINANCIAL STATEMENTS Note 1 Accounting principles The consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), together with interpretation statements from the International Financial Reporting Interpretations Committee (IFRIC), to the extent that they have been approved by the European Commission for application within the European Union. In addition to IFRS, additional rules from the Swedish Annual Accounts Act and the Swedish Financial Reporting Board s RFR 1, Supplemental Financial Statements for Groups, were also applied. PostNord Group s interim report is prepared in accordance with IAS 34, Interim Financial Reporting, and with supplementary rules from the Annual Accounts Act. The same accounting principles and methods of calculation were used in this interim report as in the 2014 Annual and Sustainability Report. The parent company applies the Annual Accounts Act and RFR 2, Accounting for Legal Entities; in effect, the same accounting principles as the Group. The differences between the parent company s and the Group s accounting principles result from the parent company s limitations in applying IFRS as a consequence of the Annual Accounts Act and the Act on Safeguarding of Pension Commitments, and are to some extent based on tax considerations. The same accounting principles and methods of calculation were used in this interim report as in the 2014 Annual and Sustainability Report. Note 2 Segment reporting PostNord s organization into business areas is based on the manner in which PostNord is governed and activities are reported to management. Market pricing applies to internal dealings between PostNord business areas. There is no latitude for making external purchases where the service in question is available internally. In PostNord s operational structure, though not in its legal structure, cost distribution of corporate shared service functions is at cost price. From 2015 the financial reporing apply the new organization with segments per country division. Numbers for 2014 are restated for comparability. Countries (see Countries section) Countries are divided into the following country organizations: PostNord Sweden, PostNord Denmark (incl. Germany), PostNord Norway, PostNord Finland, PostNord Strålfors and Other countries. The countries market and sell the business areas' end-to-end solutions within the Nordics. PostNord Sweden offers mail- and logistic solutions as well as e-commerce at the Swedish market and is also responsible for PostNord's fulfilment business. PostNord Denmark offers mail- and logistic solutions as well as e-commerce at the Danish market and is also responsible for PostNord's e-commerce and logistics business in Germany. PostNord Norway and Finland offer mail- and logistic solutions as well as e-commerce at the Norvegian and Finnish market respectively. PostNord Strålfors operates in the area of information logistics. The company develops and offers communication solutions that create stronger, more personal customer relationships for companies that have large customer bases. Other comprises business outside the countries served by the segment, shared services and corporate functions including the parent company and Group adjustments. The adjustments are IFRS adjustments regarding pensions in accordance with IAS 19, Employee Benefits, and finance leasing in accordance with IAS 17, Lease Agreements. From Other, service costs for shared services and corporate functions are allocated to the countries. Cost allocations are taken up as income in Other under Other Income, Internal. Within the countries, cost allocations are recognized in Other Expenses. Eliminations comprise the elimination of internal transactions. Business segments (see Business Areas section) Business area Mail & Communication provides distribution solutions in the communication market for physical and digital mail, direct mail and newspaper services, as well as facility management services. Business area Logistics offers logistics services in the areas of parcels, express and messaging, consignment freight, mixed cargo, thermal, Air & Ocean and third-party logistics. Business area Logistics has a comprehensive offering and distribution network for businesses and retail customers in the Nordic market. PostNord Strålfors operates in the area of information logistics. The company develops and offers communication solutions that create stronger, more personal customer relationships for companies that have large customer bases. 19 PostNord (publ), Interim report January-June 2015

21 Not 2 Segment reporting Q1 Q2 Q3 Q4 Q1 Q2 SEKm ) 2) PostNord Sweden Net sales 5,799 5,682 5,445 6,228 5,818 5,665 of which internal Operating income (EBIT) Operating margin, % 3) 1,2% 1,8% 7,1% 3,0% 3,9% 3,1% Adjusted operating income (EBIT) 4) 305 Adjusted operating margin, % 3) 4) 4,9% PostNord Denmark 1) 2) 5) Net sales 2,560 2,453 2,439 2,712 2,567 2,402 of which internal Operating income (EBIT) Operating margin, % 3) -0,9% -7,9% -2,3% 2,0% -1,8% 12,4% Adjusted operating income (EBIT) 4) Adjusted operating margin, % 3) 4) 4,5% -8,4% PostNord Norway 1) 2) Net sales 1,042 1,078 1,089 1,104 1,077 1,056 of which internal Operating income (EBIT) Operating margin, % 3) 1,2% 1,2% -0,6% -5,9% 1,0% -0,5% Adjusted operating income (EBIT) 4) -50 Adjusted operating margin, % 3) 4) -4,5% PostNord Finland 1) 2) Net sales of which internal Operating income (EBIT) Operating margin, % 3) -1,9% -1,3% 1,2% -1,1% 0,6% -0,6% Adjusted operating income (EBIT) 4) -2 Adjusted operating margin, % 3) 4) -1,1% PostNord Strålfors 1) 2) Net sales of which internal Operating income (EBIT) Operating margin, % 3) 0,2% -1,4% 1,4% -8,3% 4,1% 1,4% Adjusted operating income (EBIT) 4) 14 Adjusted operating margin, % 3) 4) 2,3% Other countries and eliminations 1) 2) Net sales of which internal Eliminations Operating income (EBIT) Group total Net sales 9,999 9,816 9,535 10,600 10,033 9,666 Group operating income (EBIT) Group net financial items Group income before tax ) Division into geographic areas is principally based on corporate registered domicile. 2) 2014 numbers are restated in accordance with the new organization. 3) From 2015 a new definition of operating margin (operating income as % of net sales) is applied. Numbers for 2014 are restated for comparability. See note 7, Definitions. 4) Adjusted for items affecting comparability. See note 7, Definitions. 5) Including Logistics' operations in Germany. 20 PostNord (publ), Interim report January-June 2015

22 Note 3 Income statement, restructuring costs by segment Q1 Q2 Q3 Q4 Q1 Q2 SEKm PostNord Sweden PostNord Denmark PostNord Norway PostNord Finland PostNord Strålfors Other Total Note 4 Other provisions Q1 Q2 Q3 Q4 Q1 Q2 SEKm Opening balance 1,941 2,027 2,005 1,874 2,411 2,291 Provisions of which restructuring activities of which pensions of which other Reversals Utilitzations of which restructuring activities of which other Translation effects Closing balance 2,027 2,005 1,874 2,411 2,291 2,084 of which current of which non-current 1,337 1,370 1,393 1,730 1,655 1,526 SEKm Jan-Mar Jan-Jun Jan-Sep Jan-Dec Jan-Mar Jan-Jun Opening balance 1,941 1,941 1,941 1,941 2,411 2,411 Provisions , of which restructuring activities , of which pensions of which other Reversals Utilitzations of which restructuring activities of which other Translation effects Closing balance 2,027 2,005 1,874 2,411 2,291 2,084 of which current of which non-current 1,337 1,370 1,393 1,730 1,655 1, PostNord (publ), Interim report January-June 2015

23 Note 5 Acquisitions and divestments of subsidiaries Effect of acquisitions and divestments Jan-Jun ) Jan-Dec 2014 on assets and liabilities, SEKm Acquisitions Divestments Total Acquisitions Divestments Total Goodwill Intangible assets Property, plant and equipment Other non-current assets Total non-current assets Current assets TOTAL ASSETS TOTAL LIABILITIES NET ASSETS Other items affecting cash flow 3 3 Purchase consideration paid/received Cash and cash equivalents (acquired/divested) Net effect on cash and cash equivalents ) During the second quarter 2015 Jetpak Borg AS in Norway was acquired. Note 6 Financial instruments 30 Jun 30 Sep 31 Dec 31 Mar 30 Jun Financial assets and liabilities reported at fair value in the balance sheet, SEKm Level 2 Level 2 Level 2 Level 2 Level 2 Financial investments Endowment insurance policies Other current receivables Currency derivatives Terminal settlements Cash and cash equivalents Commercial paper 250 Total financial assets Other current liabilities Currency derivatives Interest swaps Terminal settlements Total financial liabilities Jun 30 Sep 31 Dec 31 Mar 30 Jun Net borrowings, SEKm Commercial paper Credit institutions MTN bonds Overdraft credit Total current interest-bearing liabilities 781 1, ,374 0 Credit institutions 1,206 1,207 1, MTN bonds 2,948 2,948 2,949 2,950 2,948 Total non-current interest-bearing liabilities 2) 4,154 4,155 4,399 3,583 3,624 Total interest-bearing liabilities 4,935 5,326 5,194 4,957 3,624 Investments with maturities up to 3 months Cash and bank balances, excl. cash in hand ,502 2,404 1,379 Cash and cash equivalents, excl. cash in hand ,752 2,404 1,379 Net borrowings 1) 3,950 4,714 3,442 2,553 2,245 1) SEK 2,000m of unutilized credit facilities with 2017 maturity are not included in net borrowing. 2) Excluding Leasing and endowment insurance policy Reporting and fair value valuation of financial instruments For all financial assets and liabilities, reported value is considered to constitute a fair approximation of fair value with the exception of the group s non-current interest-bearing liabilities. Fair value of non-current interest-bearing liabilities totaled SEK 3,726m (5,043) as of June 30, 2015, while the reported value at the same date totaled SEK 3,624m (4,935). All financial assets and liabilities reported at fair value in the balance sheet are Level 2; see also PostNord s Annual Report, Note 29, Financial Risk Management and Financial Instruments. 22 PostNord (publ), Interim report January-June 2015

24 Note 7 Definitions Adjusted operating income Adjusted operating margin Average number of employees (FTE) Earnings per share (EPS) EBITDA Financial preparedness Net debt Total income less total costs, excluding items affecting comparability. These items are mainly provisions for restructuring costs (that cannot be seen as part of on-going restructuring work), material write-downs and capital gains/losses. Adjusted operating income as % of net sales. Previously adjusted operating income as % of total income (net sales and other income). The total number of paid employee hours divided by the standard number of hours for a full-time employee during the cumulative period from the beginning of the year. Share of net earnings attributable to parent company shareholders divided by the average number of shares outstanding. Earnings before interest, taxes, depreciations and amortizations/impairments. Cash and cash equivalents and unutilized committed credit line. Interest-bearing debt (including pension provisions) less cash and cash equivalents, financial receivables and current interest-bearing receivables. Net debt/ebitda Net debt ratio Capital employed Net debt divided by EBITDA (rolling 12-months). Net debt divided by equity (rolling 12-months). Non-interest-bearing assets less non-interest-bearing liabilities. Operating margin Operating income as a percentage of net sales. Previously operating income as % of income (net sales and other income). Return on equity (ROE) Return on capital employed (ROCE) Net income for the 12 months to the end of the period divided by average equity for the 12 months to the end of the period. Operating profit for the 12 months to the end of the period divided by average capital employed for the 12 months to the end of the period. 23 PostNord (publ), Interim report January-June 2015